Setting Up an Energy Company in the UAE
The UAE has put a strategy in place to build a sustainable infrastructure for generating power through renewable energy. Oil and gas have traditionally been the predominant source of fuels powering the UAE however, the UAE is transforming the way in which they utilise the energy mix, with the ‘Energy Strategy 2050’, the goal is to provide the country with clean energy, precisely, 7% of Dubai’s total power productivity by 2020, steadily increasing to 75% by 2050. GCC countries have come to the realisation that they cannot only rely on oil sources alone long term especially with the fast growth of the region. Therefore the GCC are strongly investing in renewable energy to achieve set out targets by 2030-2040.
The UAE is the first country to adopt a new energy strategy and targets a mix of renewable, clean and nuclear and has become known as one of the world’s leading countries to develop an efficient and reliable renewable energy strategy. The strategy includes the following breakdown:
- 44% clean energy
- 38% gas
- 12% clean coal
- 6% nuclear
The ‘Energy Strategy 2050’ is inline with the ‘UAE Vision 2021’ to inevitably create a sustainable environment by reducing carbon footprint, increasing air quality and adopting clean energy. The overall goal of this strategy is to increase the usage of clean energy from 25% to 50% by 2050, to reduce carbon footprint by 70% and to increase energy consumption by individuals and businesses by 40%. The UAE government is investing over AED 600 billion by 2050 to ensure that this strategy is implemented and predicted goals are met. Currently the worlds largest concentrated solar plant is being constructed in Dubai amongst a multitude of other projects under construction or in the pipeline; this will make the UAE the third in the world for production of concentrated solar power.
How to Set Up an Energy Company in the UAE
There are many opportunities within the GCC, more specifically the UAE for region for pioneering companies to grow their business within the region. With cutting-edge energy projects already in motion in the UAE, the Energy and Power Industry offers advantageous investment opportunities across the board; for those who are interested in setting up a renewable energy venture and service companies which support the industry such as, engineering, technology and professional services. There is growing demand and many opportunities in the field of energy production*, you must consider the following steps to initiate set up of a business in this industry within the UAE:
Step 1: Establish what the legal form of the new business will be
Step 2: Register a trading/company name
Step 3: Look into office lease options and obtain a contract
Step 4: Apply for a trade licence and obtain approvals from relevant departments
Step 5: Obtain a Department of Economic Development (DED) Trade Licence
Step 6: Register the new business with the Labour and Immigration Departments
Step 7: Open a company bank account
Step 8: Recruit and apply for employee visas
**Individuals who are interested in working within the renewable energy sector as a Solar or PhotoVoltaic Consultant or Contractor must register with Dubai Electric and Water Authority (DEWA), a 5 day training course is required which covers competence and safety awareness, for more information, visit: www.dewa.gov.ae
Where can you set up a company in the Energy Sector in the UAE?
Masdar City Abu Dhabi: Located a short distance away from Abu Dhabi International Airport, Masdar City is a booming clean-technology business hub. Setting up a business within this freezone offers entrepreneurs a wealth of benefits to include 100% foreign ownership as well as exemption from corporate taxes.
Dubai Multi Commodities Centre (DMCC): A government entity established in 2002 to enhance commodity trade flows through Dubai. DMCC is the dedicated global centre for more than 14,100 businesses from a wide range of industries and sectors. There are many advantages which DMCC offers to businesses who are setting up in the UAE.
Dubai Silicon Oasis (DSO): Established in 2005, Dubai Silicon Oasis (DSO) is a technology park with an integrated community, DSO is a 100% government-owned freezone which facilitates and promotes modern technology based industries. Many incentives and benefits are provided to companies operating within the freezone.
Mainland: Mainland licenses can bring companies a wealth of benefits including, flexibility to do business anywhere in the UAE, an unlimited number of visas in addition to exemption from business &/or personal taxes plus many more advantages.
A company looking to set up a mainland licence in the UAE have several formation options to choose from, these include: Limited Liability Company, Branch and Commercial Agency. There are certain factors which affect the cost of a mainland license; the nature of the activity and licence required; whether it is commercial, industrial or service-oriented and the legal form of the company.
The process of setting up a renewable energy company in the UAE is arguably complex, and as such it is advisable to seek professional advice. PRO Partner Group is experienced at guiding companies through the required procedure to complete their classification, so that they are ready to operate safely and legally as quickly as possible.
For more information on setting up an Energy company in the UAE, please contact us on +971 (0)4 456 1761 / email@example.com
In our latest blog we go in-depth about how to set up a #RenewableEnergy company in the #UAE, check it out now https://t.co/an6OeAKJTs#Energy #SolarPower #Oil #Gas #AbuDhabu #Dubai #BusinessSetup #CompanyFormation #Investment #Technology #UAEVision2021 #EnergyStrategy2050
— PRO Partner Group (@PROPartnerGroup) March 21, 2019
A Special Purpose Vehicle (SPV), also known as a Special Purpose Company (SPC) or a Special Purpose Entity (SPE), is an entity which is considered ‘bankruptcy- remote’. An SPV is usually a subsidiary which is protected in case the parent company goes bankrupt and considered isolated in case the same happens in reverse. An SPV can be used to finance as well as buy and sell assets which are often held on an off- balance sheet aiming to isolate financial risk.
The typical uses for an SPV are as follows:
- Risk Sharing– allows an organisation to legally isolate legal and financial risk. SPV’s are often used to form project companies for joint ventures, reflecting management responsibilities whilst isolating the partners’ risks associated with the joint venture.
- Financing – an SPV can be used to obtain financing without increasing the debt of the parent company or exposing the parent’s asses to cross-liabilities. It also enables investors to invest in specific projects as opposed to investing in the parent directly.
- Securitisation – SPV’s are commonly used by organisations to securitise loans or other receivables. The SPV can purchase these assets by issuing securities to investors in the capital markets.
- Real estate investment – SPV’s can be used to acquire properties. If the taxes on the property sale are higher than that of the capital gain, the SPV can be sold instead of the properties and tax is then paid on the capital gain as opposed to on the property sales tax.
- Asset Transfer – certain assets can be hard to transfer, therefore, a parent company may create an SPV to own these assets. When they wish to sell the asset, the SPV can be sold a s a self-contained package.
- Raising Capital – an SPV may get favourable borrowing rates when raising capital. Since underlying assets are owned by the SPV, the credit rating may be preferable to the parent entity.
- Intellectual Property – an SPV can be used to hold the intellectual property of the parent company. Since this a non-operational entity, there would be less risk. Licence agreements can be put in place with the operating entities for them to have use of the IP.
ADGM is a financial centre for local, regional and international institutions. It is a Free Zone occupying Al Maryah Island in Abu Dhabi. ADGM has been operational since October 2015 and is established in accordance with the Federal Law No (8) of 2004, Federal Decree No (15) of 2013, Cabinet Resolution No (4) of 2013, and Abu Dhabi Law No (4) of 2013. ADGM has three independent authorities, the Registration Authority, the Financial Services Regulatory Authority (FSRA) and ADGM Courts.
Setting up an SPV in ADGM is a quick and cost-efficient process. Key features of setting up in ADGM are as follows:
- Access to broad UAE double tax treaty network
- No office required if agent appointed
- Variety of legal structures available
- No restrictions on the number of shareholders
- Common law jurisdiction
- Independent ADGM courts
- Independent regulatory framework
- No attestation required for corporate documents
- Shelf SPV’s permitted
There are two SPV types permitted by ADGM, private companies limited by shares and restricted scope companies (RSC). An RSC is a unique ADGM SPV which allows limited disclosure on the public register (full disclosure to the ADGM Registrar is still required). Once and SPV is set up, it will be provided with a commercial licence stating that it can undergo special purpose vehicle activities.
PRO Partner Group has assisted with the setup of numerous SPV’s and have recently noticed a growing demand for SPV setups in ADGM. We are able to provide swift and cost-efficient incorporation assistance. We are also able to source virtual registered office space so as to avoid the requirement for a physical office. Please get feel free to get in touch with me directly at firstname.lastname@example.org for additional information.
Abu Dhabi Global Market – #SPV’s. This article focuses on setting up an SPV in #ADGM. https://t.co/8tD3eyOhwG#SPC #AbuDhabi #UAE #DIFC #Dubai #BusinessSetip #CompanyFormation #Buy #Sell #Investment #Investors #Risk #Finance #Asset #IntellectualProperty #PRO #PROPartnerGroup
— PRO Partner Group (@PROPartnerGroup) March 17, 2019
#BalanceforBetter – Gender Equality in the Work Place
The UAE was ranked as the 11th county in the world in the ‘World Bank’s Ease of Doing Business’ index in 2019. This is a huge climb from the 21st position last year, making the UAE the easiest place to conduct business in the Middle East, leading the Arab world for the sixth successive year. The country is fast becoming a world leader in business and a global hub for tourism and trade.
By 2021, the UAE aims to achieve their gender balance targets with the end goal being within the world’s top 25 countries for gender equality. In 2016 a new UAE Gender Balance Council was formed to assist with the execution of the ‘Gender Inequality Index’ which is issued every year by the UNDP. The main focus is to improve the country’s efforts in driving women’s involvement in the development of the UAE. A new legislation has been created to ensure that a there is female presence on boards, currently there are more women in the UAE Cabinet than the UK and USA.
With many female-focused business groups and networks across a myriad of industries, there are many efficient ways for female business-owners, entrepreneurs and businesswomen to network, empowering their success in business. With the support of the UAE, women in business in the UAE are guiding entrepreneurship into a new momentum and are turning their business ideas into successful companies across many sectors.
In light of International Women’s Day, we asked some of the PRO Partner Group ladies how they feel about being a woman in business in the UAE:
“International Women’s Day is a day for celebration and acknowledgement of the progress made in the movement of women’s rights. The UAE has taken great strides in reducing the gender gap and it’s hugely important that business across all industries encourage diversity in the workplace. We must empower and support women to climb the career ladder and do this with confidence. This, in turn, will create a sustainable and healthy economy.”
– Jane Ashford, Founder, PRO Partner Group
“I think there can be false preconceptions about being a woman in the UAE. Huge progress has been made regarding gender equality and reducing the gender gap. There are numerous women’s groups and events which are aimed at promoting and supporting professional women in the region. A few years ago, I attended one of these events which consisted of a panel of three female entrepreneurs, each of a different Nationality. Each of these ladies were self-made and had started and grown companies in the UAE. I left the event feeling inspired and empowered to continue my own growth as a businesswoman in the region.”
– Jess Ashford, Deputy CEO, PRO Partner Group
“Personally I have found working in the Middle East to be the most unique experience because of the diversity in culture, people, business types, how things are done plus a million other reasons! Then add being a woman in business and it can be incredibly enlightening and door opening but not without frustrations, it is an experience that I am so fortunate to have been given and wholeheartedly enjoy. I have learnt that tolerance and patience is a real must if you want to be successful and respected, regardless of whether you are a male or a female. The UAE offers opportunities unlike any other country in the world and if you respect the country and the people they will respect you and they will help you selflessly.”
– Libbie Burtinshaw, Operations Manager, PRO Partner Group
“Being a woman in business in the UAE has been a very empowering and rewarding experience for me. While the UAE is no exception to the barriers that face working women all over the world, there is a lot of support for working women here. There are now numerous UAE led gender equality initiatives that have been implemented to drive the UAE’s vision to become one of the world’s top 25 countries for gender equality by 2021. I am fortunate to work for an organisation that promotes gender equality and diversity in the workplace and enables a healthy work-life balance for my family and I.”
– Louise Ball, HR Manager, PRO Partner Group
The UAE is a diverse country with strong values and visions to support its residents and to become a recognised global business leader. The country’s strong economy allows for the UAE to fast-track their goals and provide many opportunities to both young and mature talent. The SME sector has grown dramatically in the last few years, in accordance to the Ministry of Economy, women in the UAE have contributed to over 50% of this sector! Many regulations and company set up options have evolved to support the entrepreneur which makes starting your own business that much easier.
PRO Partner group is one of the region’s leading business formation and company support providers, we facilitate all the procedures and legalities involved in establishing and maintaining a commercial entity in the UAE, Oman and Qatar; from start to finish. For more information contact us on +971 (0)4 456 17 61, email: email@example.com
UAE Long Term Visas: Key details you need to know
With the UAE Cabinet approving new long term visa, announced earlier this year, this article aims to set out the details as well as the terms and conditions.
Investors, entrepreneurs as well as scientists, doctors and researchers, will be granted permission to stay in the country for up to 10 years as part of the plan.
The UAE Cabinet has also approved the introduction of long term Retirement Visas and long term Visas for outstanding Students.
For Investors, both within the UAE and abroad, the long-term visa can be divided into two categories:
- 5-year residence visa
Minimum investment of Dh5 million
- 10-year residence visa
Minimum investment of Dh10 million with at least 60% non-real estate investment i.e. public investment through new business partnership or addition of funds to an established company
Four Key Terms and Conditions:
- Entire investment amount to come from the investor, without any loans or financing – supporting evidence will need to be supplied for this
- The investment must be retained for a period of 3 years under standard liability and with a financial solvency not exceeding Dh10 million
- Investors will be permitted multiple entries to the UAE for a six-month period, whilst applying for the long-term visa requirements
- The long-term visa could also be extended to include business partners, (provided that each partner contributes Dh10 million), the spouse and the children, as well as one executive director and one advisor
For Entrepreneurs, the key requirements for long term visa are:
- A previous project with a minimum of Dh500,000
- Approval of accredited business incubator
Entrepreneurs will be granted a five-year visa with the possibility of upgrading to ten-year visa. An entrepreneur’s business partners, three executive directors, spouse and children will also be granted visas. Entrepreneurs will be given permission to enter the Emirates for a six-month period with multiple entry, and the option to renew for another six months, to apply for the visa.
Visas for specialists in science and knowledge
Scientists, doctors and researchers will be granted a 10-year visa. To qualify they must have:
- A valid employment contract in a specialised, priority field
- Doctors and Scientists must meet at least two of the following conditions in addition to holding a PhD degree and 10 years professional experience:
- PhD degree from one of the world’s top 500 universities
- Award/Certificate of appreciation for their work
- Contribution to scientific research
- Published articles or scientific books in distinguished publications
- Membership of an organisation which requires academic excellence
- Scientists must be accredited by the Emirates Scientists Council. Holders of the Mohammed bin Rashid Medal for Scientific Excellence are also eligible for the 10-year visa. Spouses and children will also be included under the visa for researchers, scientists and doctors.
Outstanding Student Visas
Students who have earned a grade of at least 95 per cent in secondary school, and a GPA of at least 3.75 upon graduation from university will be eligible for a five-year visa. Their families will also be included on the visa. This visa can be eligible for 10-year if the student is deemed exceptional.
For more information on long term visas or company formation in the UAE, please visit the PRO Partner Group website or contact us on +971 (0)4 456 1761 / firstname.lastname@example.org
#Investors, #entrepreneurs as well as #scientists, #doctors and #researchers, will be granted permission to stay in the country for up to 10 years as part of the plan.#UAE #LongTermVisa #Visa #ResidentVisa #ResidentPermit https://t.co/idjKSKFNeD
— PRO Partner Group (@PROPartnerGroup) January 3, 2019
Increased foreign ownership of companies in the UAE is now possible thanks to a new Foreign Direct Investment Law (Federal Law No.19 of 2018), which has now come into effect after being published in the UAE’s Official Gazette.
Aiming to promote and develop the country’s investment environment, senior officials have reported that this will boost FDI by up to 20 per cent across the next two years.
The UAE offers lucrative opportunities for foreign investment and the strengths of the UAE include its easy access to oil resources, low energy costs, a willingness to diversify the economy and a high purchasing power.
Foreign companies seeking to establish an entity onshore in the UAE would previously be required to partner with an UAE national shareholder, who would own 51 per cent or more of the shares in the company.
The new legislation provides the framework for the UAE Cabinet to permit foreign shareholders to own increased levels of foreign ownership (more than 49% of shares) in companies operating in certain sectors.
As per the law, a ‘Foreign Direct Investment Unit’ is to be established in the Ministry of Economy. The FDI unit will be responsible for proposing FDI policies, establishing a comprehensive database of foreign direct investment projects as well as licensing foreign direct investment projects and evaluating their performance.
In a report from Clyde & Co, it was noted that under the FDI law, foreign investment may be permitted in sectors of the economy that do not appear in a ‘negative list’ as follows.
- Petroleum exploration and production
- Fishing and related services
- Investigation, security, military sectors, and manufacturing of weaponry, explosives, military equipment and associated devices and uniforms
- Postal, telecommunications and audio-visual services
- Banking and financing activities
- Land and air transport services
- Insurance services
- Publishing and printing services
- Pilgrimage and Umrah services
- Commercial agencies services
- Labour and servant services, and recruitment of personnel
- Medical retail businesses (e.g. privately-owned pharmacies)
- Electricity and water services
- Poison control centres, blood banks and quarantines
The UAE Cabinet has the right to add or remove any sectors from this negative list.
The FDI Law establishes a ’positive list’ of sectors of the economy in which greater levels of foreign investment will be permitted. There is currently not one set list of sectors and it is expected that more detail will be released in the coming weeks. Clyde & Co have reported that the UAE cabinet may:
- Dictate the level of foreign ownership permitted, this could be 100 percent but could be less
- Place restrictions or requirements on the type of legal entity which may conduct business in the relevant sector
- Apply minimum capital requirements
- Enforce Emiratisation requirements
- Allow greater levels of foreign ownership than is currently the case in specific Emirates
It is reported that if an application for an increased level of foreign ownership in a sector on the positive list is successful, then a license will be issued by the Economic Department. In due course, further regulations will be issued, setting out the detailed procedures to be followed for registering and renewing the licence of a foreign investment company.
As a new legislation, the FDI Law is open to interpretation and it is not yet certain how FDI law will be implemented nor what degree of foreign ownership will be permitted in each sector.
Increased foreign ownership of companies in the #UAE is now possible thanks to a new #ForeignDirectInvestment #Law (No.19 of 2018), which has now come into effect after being published in the UAE’s Official Gazette.#FDIhttps://t.co/PVb2DjJJuw— PRO Partner Group (@PROPartnerGroup) December 30, 2018